Open Source Drivers

NOTE: The features listed are based off of the development repository at the time of this writing (2011-01-17). This does not mean that every Linux distribution will have the same capabilities. More than likely, major distributions will have an older, better-tested version of the graphics stack as a default and offer bleeding-edge versions of the driver in a repository. For a concise chart of features supported by the open source radeon drivers, see: http://www.x.org/wiki/RadeonFeature
Here are the highlights:

Switchable Graphic Chips Status

Some laptops (and other systems) are now being sold with both an integrated, low power GPU, and a discrete, high performance GPU AMD Switchable Graphics Technology. There are two basic types of hybrid designs. Older hybrid systems use a multiplexor (MUX) to switch between GPU's. Newer systems (those with PowerXpress >= 4.0) are MUX-less. As far as I can tell, PowerXpress 4.0 started with RadeonHD 6000-series GPU's, and systems with older ATI GPU's have a MUX, but don't quote that.

Switchable Graphic Chips Warning

WARNING

Carefully research before purchasing a laptop, or you may not be able to fully use the hardware you pay for.

MUXed Systems

Open source drivers support switching from integrated to discrete graphics cards using vga_switcheroo on MUXed systems. However, the performance of the chips with the switchable open source drivers may not be optimized. For example, with the open source driver on the HP DV7-4045ea you can switch between the 4200 and 5650; the 4200 works okay, but although the 5650 does work, it does not perform well.
Catalyst supposedly supports switching using the following commands, but reports of success are scarce:

MUX-less Systems

On MUX-less systems, the discrete card is used solely for rendering, not display. At the moment, the X server does not support rendering and display from different cards so the discrete card can not be used with MUX-less systems at the moment. Most new laptops (2011+) are MUX-less.
There is a bug raised against the inability to switch between integrated and discrete graphics cards Official AMD Bug

Video Decode Acceleration Status

VA-API/XvBA Wrapper (RadeonHD >= 4000 using Catalyst)

Video acceleration can be achieved through drivers supplied at gbeauchesne Modern distros should have this installable from their repo (Debian/Ubuntu does).
Note that this wrapper is no longer maintained/developed and should be considered a dead-end.

Using XvBA in XBMC (with Catalyst >= 11-11)

The XBMC project has implemented acceleration in their media player using AMD's libxvba library. This is a fairly new/experimental feature at the time of this writing, but XBMC claims positive feedback. Install Instructions

Gallium3D VDPAU (open-source driver)

The open-source 3D mesa driver now implements acceleration through a VDPAU/VA-API wrapper that uses the 3D engine. This is a fairly new/experimental feature at the time of this writing, so it may require rebuilding mesa. AMD is interested in using the UVD hardware directly, but this is currently held up for legal reasons.

EyeFinity

Catalyst supports more than two simultaneous outputs on RadeonHD5xxx cards having more than two physical independent out. Default settings starts every monitors in a cloned stage, but you can switch to a multiple display desktop via the Catalyst Control Center. Be aware that the AMD Catalyst Control Center does not let you fix arbitrary position settings : it only lets you approximately place your monitors on a virtual desktop. It's often best to adjust screen alignment using the "Position +x +y" option in xorg.conf.